Happiness Economics: Validity of subjective wellbeing measures and considerations for public policy

Abstract: Happiness is a relatively new discipline within economics. Traditionally, economists have not paid too much attention to it since they considered that both indicators and theoretical assumptions in which this discipline was based were not neither reliable nor useful for policy recommendations. However, especially in the last decade, there has been extensive research which, if not proved, at least has provided enough arguments to believe that this discipline can be worthy for anyone interested in understanding what are the truly determinants that make people think they have a good life. This literature review emphasizes the validity, reliability and usefulness of happiness economics as a novel discipline to provide new insights in economics research, especially in public policy decision-making.